Airwallex Faces Mandatory AML Audit Amid AUSTRAC Regulatory Crackdown

The Australian Transaction Reports and Analysis Centre (AUSTRAC) has mandated that Airwallex undergo a thorough external audit. This requirement aims to assess the company’s anti-money laundering (AML) and counter-terrorism financing controls, ensuring they align with the complexity and scale of its operations.

Regulatory Oversight and Audit Details

AUSTRAC has tasked Airwallex to bear the cost of the audit and submit the auditor’s findings within 180 days. The audit will evaluate whether the company effectively identifies customers, monitors transactions based on risk, and fulfills its obligations for reporting suspicious transactions.

Context of the AUSTRAC Action

While AUSTRAC does not accuse Airwallex of any criminal activities, this mandatory audit places the company in a select group that has undergone more intense scrutiny. Prior audits by AUSTRAC have included several prominent payment service providers like Afterpay, PayPal Australia, and Binance Australia.

Implications for Airwallex

• The audit signals increased scrutiny of Airwallex as it has expanded its services rapidly over the past two years.
• Airwallex now serves a diverse range of clients with a range of new products and global payment channels.
• Increased transaction volumes elevate the risk of financial crime if compliance measures are inadequate.

Compliance and Regulatory Challenges

AUSTRAC is particularly focused on how Airwallex’s compliance systems match its evolving business model. The agency emphasizes that existing controls applicable to smaller platforms may fail as the platform grows.

Recent Company Developments

Airwallex has recently experienced significant growth, achieving a billion-dollar valuation and expanding into Asian, European, and North American markets. This expansion included the acquisition of a South Korean payment firm earlier this year.

Future Directions and Regulatory Reforms

The AUSTRAC audit is timely, coinciding with Australia’s broader regulatory reforms set to take effect in March 2026. These reforms aim to enhance expectations regarding risk assessment and governance in financial transactions.

Impact of the Audit

The focus now shifts to the audit scope, the selection of an external auditor, and AUSTRAC’s next steps post-audit. While audits do not automatically lead to enforcement actions, they can complicate banking relationships and access to financial services. Airwallex’s regulatory standing and the trust of its partners are at stake during this critical phase of expansion.